Bollinger Bands

Developed by John Bollinger in the 1980s, Bollinger Bands are a chart overlay volatility indicator used in technical analysis to measure high and low prices in relation to historical price action. Bollinger bands are comprised of a moving average and two trading bands, one added and one subtracted standard deviation above and below it. The bands indicate volatility, when they are far apart then volatility in the asset being charted is high, when they narrow in on the moving average then volatility is low. When an asset’s price consistently touches the lower band then it is regarded as being oversold and may be due for a reversal. When its price continues to touch the upper band it is thought to be overbought and considered likely to reverse. In an uptrend price action will move between the moving average and the upper band, if it crosses below the moving average line a downward trend reversal may be in effect. Conversely, in a downtrend price action will tend to move between the moving average and the lower band, should it cross above the moving average an upward trend reversal may be in effect.

Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, CFDs may not be suitable for all investors because you may lose all your invested capital. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Past performance of CFDs is not a reliable indicator of future results. Most CFDs have no set maturity date. Hence, a CFD position matures on the date you choose to close an existing open position. Seek independent advice, if necessary. Please read FxPro’s full ‘Risk Disclosure Statement’.

FxPro UK Limited and FxPro Financial Services Limited do not offer Contracts for Difference to residents of certain jurisdictions such as the United States of America, the Islamic Republic of Iran and Canada. With regards to the FSB authorisation, FxPro provides execution services and enters into principal to principal transactions with its clients on FxPro's prices; these transactions are not traded on an exchange. In addition, Contract for Differences (CFDs) with FxPro are not regulated by the FAIS Act and intermediary services are not provided.